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HomeMy WebLinkAboutReso 136-2005 RESOLUTION NO. 136-21005 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION ADOPTING FINDINGS AND AUTHORIZING EXECUTION OF A SUBORDINATION AGREEMENT FOR THE GRAND OAK AFFORDABLE HOUSING PROJECT WHEREAS, on March 9, 2005, the Redevelopment Agency of the City of South San Francisco authorized the execution of a Construction Loan Agreement and the provision of a loan in the amount of $3,500,000 (the "Loan") to Grand Oak Associates, a California limited partnership affiliated with BRIDGE Housing Corporation (the "Developer") to develop an affordable housing project on Oak and Grand Avenues (the "Project"); and WHEREAS, in connection with the Loan, the Develope:r and the City executed an Affordable Housing Agreement and a Rent Restriction and Right of First Refusal Agreement (collectively the "Agreements"); and WHEREAS, pursuant to the Agreements the Developer has agreed to restrict the rents for 21 of the units developed as part of the Project to affordable llevels and to provide the City with purchase rights in the event that the Project or any unit tht:rein is offered for sale prior to the expiration of the term of the Agreements; and WHEREAS, the California Statewide Communities Development Authority ("CSCDA") will issue bonds in the amount of$11 ,372,000 for the Project, and CSCDA has assigned its rights under the bond documents to Silicon Valley Bank ("Lender"), which will provide construction and permanent financing for the Project; and WHEREAS, the Lender has indicated that it would be unwilJling to provide construction and permanent financing for the Project without subordination of the Agreements, and the Developer has indicated that it has been unable to find alternate sources that would enable it to finance the Project without subordination of such documents; and WHEREAS, the proposed Subordination Agreement provid1es the Agency and the City with rights to receive notice and to cure defaults arising under the senior loan documents; and WHEREAS, the Lender has indicated that it would be unwilling to provide construction and permanent financing for the Project without the Omnibus Rider modifYing the Deed of Trust and the Regulatory Agreement. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco as follows: Section 1. The City Council finds that without subordination of the Agreements an economically feasible alternative for financing the Grand Oak housing development is not reasonably available. 795485-1 Section 2. The City Council authorizes the City Manager or his designee to execute a Subordination Agreement and Omnibus Rider substantially in the form on file with the City Clerk and to take such other actions reasonably necessary to carry out the intent of this Resolution. * * * * * * I hereby certifY that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a Regular meeting held on the 14th day of December 2005 by the following vote: AYES: Councilmembers Mark N. Addiego. Pedro Gonzalez and Karvl Matsumoto, Vice Mavor Richard A. Garbarino and Mayor Joseph A. Fernekes NOES: None ABSTAIN: None ABSENT: None ATTEST: 1; .0 /<_ -I~J I a. r71 , /"'r..J jJt L . City Clerk 795485-1